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Welcome to my new blog!

I’ve created it because I’ve long believed that to be in the profession of business intelligence is to have a duty to not only make your clients smarter, but the rest of industry as well. That’s because smart companies improve the economy, make better employers, and offer greater rewards to shareholders. And all of that increases the general good – and we all want that.

So, in the weeks and months ahead, I plan to use this blog to share with you ideas, anecdotes and the acquired wisdom I’ve gained from years in the trenches helping companies make smart decisions. I hope you’ll come back on a regular basis. That you’ll find this blog a compelling read. That it helps you become a better, smarter businessperson. And most of all that we’ll have fun, and a few laughs, along the way. . .

I don’t have all the answers. But I do want to start a conversation – and I hope that you’ll comment on what you’ve read. I’ll try to answer as many of your notes as I can – after all, I’m trying to be smart about running my own company – and we’ll have ourselves a conversation.

Now, let’s get this blog started in the most delicate and diplomatic way possible:

The Top 7 Stupidest Things Believed by Bad Companies

If there is one thing I’ve learned over the years is that you can’t judge whether a company is good or bad, successful or unsuccessful, or smart or dumb simply by the way it acts during the brief interval in which you typically have to judge.

Bad companies, just like good companies, have nice offices filled with well-dressed and busy people. They are decisive. They take a lot of meetings. They have smart people in their labs, and funny and clever people in their sales force. They establish goals and strategies, and subscribe to the latest management theories. They hire PR firms and advertising agencies to cleverly promote them. And they have an expensive corporate logo that shows up on their elegant web site, on the sign out front of their headquarters, and on the wall behind the receptionist in their lobby – right next to the display case with all of their industry awards.

In other words, a bad company looks just like – sometimes even better – than a good company. And if you buy into that look, you will be as dumb as they are. Because bad companies fail – and when they do, they cost their customers, their employees and their investors dearly. Most of these companies were once good companies in their day, and now leverage long established names built on the backs of innovators of a previous era. They can exist, coasting for years or even decades, but fall far short of their potential.

So if you can’t tell a bad company by its looks, how do you know? The answer, I’ve learned, is to find out what they believe. It is those beliefs, once they are put into practice, that ultimately decide whether a company is smart and successful, or dumb and doomed. Here are the winners – er, losers:

1. We never fail on any project and all projects finish on time – This is the classic chest thump of the bad company, and I’ve never understood why stupid executives are so proud to make it. The fact is, if you never fail and you are never late, that means you have never taken a risk. Real, transformative, competitor-crushing innovation is always a leap into the unknown and you have no idea what potholes and pitfalls await you. That’s why, if you are going to succeed in the long-term, a certain percentage of projects should fail or be late. And these projects should not be service bureau tasks, but critical, business enablement tasks that look to drive employee effectiveness. To play it so safe as to take the risk out of your business is to stand in the street and wait for your more innovative, less failure-averse, greater risk-taking competitors to run you over.

2. The worst thing that can happen is if two people show up at a meeting with different numbers – Oh Lord, we could never have that! It would mean that we all aren’t on the same page on all things all of the time! This is actually two types of stupid. The first is the belief that if decision-makers are armed with anything less than perfect data, catastrophe and endless blame will result. This ignores the fact that there is no such thing as ‘perfect’ data. And that all information is open to multiple interpretation. And most of all, that no data is almost certainly worse than partial data. The second is the attitude that conflict within an organization is always bad. In fact, two different people showing up with different numbers may in fact represent two different perspectives on a problem . .. and that’s good. Decision-making depends on data and is typically directional in nature. Being correct within 1% rarely buys better decisions. Scientist know that all data has errors, but that hasn’t stopped discovery. It is far better to get as much information as possible into the hands of people with the appropriate caveats. Rarely is better decision-making accomplished because of ignorance.

3. We hate to negotiate – In other words: We’re afraid the other side is smarter than we are. Bad companies love to rationalize vendors as a sign of strategic competence – rather than a cover for their own lack of competence. You see a lot of this in corporate IT departments: what is presented as standardization is usually just a way to minimize training and investment in employees. This fear (because that’s what it really is) of negotiating most often results in IT settling for “cafeteria style” solutions from one-stop mega-vendors because it is so much easier than actually determining what would be best for fellow employees and negotiating separate contracts with multiple vendors. The employees suffer because they get second-rate support; the company suffers because, by encouraging a monopolistic sole-provider relationship it loses all of its future contract leverage. But at least the IT department, proudly proclaiming its “one throat to choke” mantra, can pretend it’s actually trying to help the company . . .rather than, in reality, running away from its responsibilities.

4. We keep our money under the mattress rather than in a bank – Dumb organizations believe that keeping confidential data in-house is a major security advantage. But that’s like burying your savings in a Mason jar in the backyard because, well, it’s your backyard and you look at it all the time. The fact is that rarely do organizations have the same security and rigor as companies that are actually in the business of protecting that information -- and the incentive to steal it – are your own employees. They are your greatest security risk . . .so why do you want to keep your jewels in their desks? Put them in someone else’s vault. Store owners long ago figured out that you clear the till each night.

5. We’re everything to everybody – Um, no. No you aren’t – not even to your best customers. If you’ve ever watched Kitchen Nightmares you know that the biggest mistake most restaurants make is having too large a menu. Chef Gordon Ramsey always pares that menu down – often over the protests of the owners -- to a few things the restaurant is good at. The message is to keep your menu small. Stick to your core competencies. Delight your customers with a few things you are very good at, rather than overwhelm and disappoint them with an abundance of mediocrity. Smart businesses know this and divest themselves of products and services that they can’t do better than their competitors – or that distract them from improving their ‘core.’ A “do it all yourself” mentality often leads to underestimating the difficulties involved, the level of competence needed to do the job well, and the money that will be diverted from more important tasks. You can’t be everything to everybody, so instead be the best thing for your highest profit customers.

6. We have a well-established career path – Generally this is code for “as long as you do your time, you’ll keep getting raises and promotions”. The biggest thing Warren Buffett does when he buys a company is make sure that people’s incentives are aligned with what they are expected to do. It sounds simple, but it’s incredibly powerful. There’s an entire class at Harvard Business School that can be summed up with “people do what you pay them to do”. But, if you look at the employee review, promotion and incentive compensation system of most companies, particularly in technology, you’ll find a depressing lack of alignment with business goals. Rarely, if ever, is anyone ever compensated for actually increasing employee productivity or driving business results – and that’s why dumb companies are always astonished when their best and brightest talent inevitably leaves for better-paying jobs elsewhere. On the other hand, these same dumb companies do an excellent job of rewarding people for merely showing up every workday for twenty years. ..

7. We’re very proud of our ”XXX” certification – Smart companies realize that having taken the test is far less important than the knowledge learned. Smart companies realize that compliance with a large, broad-based legal or public standard commits you only to the lowest bar of committee-based mediocrity. Smart companies call their elected representatives to complain about the stupidity of Sarbanes-Oxley; dumb ones construct their businesses around it. Standards, certifications and compliance are tangential to business excellence. The last ten years should have taught us that when compliance goals and business goals are mixed – “We’re going to grow market share and be ISO 9000 certified!” -- the result is always bad. Why? Because negotiating between the two requires trade-offs – and employees, trying to read what their bosses really want, are reduced to promoting one over the other as company incentives drive them. A classic example of mixing the two with horrible results is Wall Street: one reason for the crash of 2008 is that financial incentives for business performance so completely trumped compliance and governance – i.e., the financial rewards were so great and the legal punishments so small –that everyone gamed the system. In my experience, the best companies focus on the immense task of being successful in their businesses, and they have a clean line between that and compliance. Trying to have the same people serve both is a recipe for mediocrity. Strong compliance people need independence from the business to put up guardrails. They are not the ones you want driving business strategy. Think about it, when was the last time you went to a restaurant because they had a board of health class “A” rating? You go because the food is good. Business success is hard enough without constantly looking over your shoulder. No one is going to remember you for winning that Lucite lump in the lobby.

If I were to summarize all of these stupid beliefs into one “Golden Rule”, it would be this: Avoid all rules that can’t readily be distinguished from laziness or pain avoidance

In the weeks and months ahead, I intend to look at each one of these Stupid Things more closely – and provide some real-life examples. Maybe even name a few names. The fact is, most of us have made some of these mistakes before we got wiser. In the meantime, how about helping me add to this list? Got any more universal examples of business stupidity you’d like to share? Drop me a note and I’ll give you credit for your contribution.